Build ₹1.55 Cr Corpus Via PPF: Know The Timeline For ₹92,000 Monthly Income

Small savings schemes in India are often regarded as tools for achieving modest financial targets. However, consistent investment over a long duration in government-backed instruments like the Public Provident Fund (PPF) can do more than meet short-term needs. With discipline and time, such schemes can potentially build substantial, tax-free retirement wealth. This article explains how a ₹1.5 lakh annual PPF investment can help build a corpus of over ₹1.54 crore and generate a monthly income of nearly ₹92,000 in later years, entirely free from tax implications.

How to Open and Maintain a PPF Account

To get started, any Indian resident can open a PPF account either in a post office or a recognised bank. A minimum deposit of ₹500 is necessary in each financial year to keep the account active. The maximum permissible contribution is ₹1,50,000 annually.

The account can be opened individually and, in some cases, in the name of a minor. Importantly, the entire amount invested is eligible for tax deduction under Section 80C of the Income Tax Act, subject to the overall annual limit of ₹1.5 lakh.

Interest Rate and Compounding Benefit

PPF currently offers an interest rate of 7.1%, which is compounded annually. The rate is declared by the Ministry of Finance every quarter but does not vary across institutions — the same applies whether the account is with a bank or post office.

To maximise interest earnings, it is advisable to make the annual contribution between 1st and 5th April each financial year, as interest is calculated on the lowest balance between the 5th and the end of each month.

Maturity Tenure and Extensions

The PPF matures after 15 years. At this point, the account holder can withdraw the entire amount. Alternatively, the account can be extended in blocks of five years, with or without additional contributions.

If the individual opts not to contribute during the extension period, the corpus will still earn interest. However, such non-contributory extensions are allowed only once. For those who continue contributing, partial withdrawals of up to 60% of the corpus are allowed once each financial year during each five-year block.

How Long-Term PPF Can Yield ₹92,000/Month

Let’s consider a disciplined investor contributing ₹1.5 lakh every year for 30 years — 15 years of the initial term plus 15 years of extended contributions. After three decades, the total investment would be ₹45 lakh.

At a constant interest rate of 7.1%, the corpus at the end of 30 years is estimated to be ₹1.54 crore, comprising ₹1.09 crore in interest and ₹45 lakh in principal.

If the individual decides not to invest further and only withdraws the annual interest post the 30th year, the expected interest income would be approximately ₹10.97 lakh per year — or about ₹91,418 per month. This income would be completely tax-free under the Exempt-Exempt-Exempt (EEE) status of PPF.

What If You Wish to Continue Beyond 30 Years

Even after 30 years, investors can extend the account by another five years. They can choose to invest only the minimum ₹500 annually or continue with ₹1.5 lakh if they wish to grow the corpus further.

If they stop making large contributions and switch to the minimum required to keep the account active, they can still withdraw the entire ₹10.97 lakh annual interest for multiple years — and later claim the full ₹1.54 crore principal. The cycle of passive income can potentially continue for as long as the account remains open and earns interest.

Why Experts Endorse Long-Term PPF Strategy

According to financial experts, PPF stands out as a low-risk, long-term wealth-building option, particularly for conservative investors. Its government backing, guaranteed returns, tax benefits, and flexibility in withdrawal after maturity make it ideal for retirement planning. The ability to generate consistent, tax-free income without risking capital is a strong incentive for many long-term savers.

Disclaimer: This article is intended for informational purposes only and does not constitute financial advice. Readers are advised to consult certified financial planners or tax professionals before making investment decisions. The data and estimates provided are based on current interest rates and expert assumptions, which are subject to change depending on future government policies.